Macquarie’s recent woes, which yesterday culminated in a 25% earnings downgrade, surprised many including, it appears, many Macquarie staff. But the bank's worsening performance and lacklustre return on equity is the inevitable result of a business that has lost its primary competitive advantage. The Macquarie machine excelled partially on the basis of fees generated from captive satellites -- it was its "Macquarie Model" that turned the bank into the "Millionaire’s Factory" in the early-to-mid-2000s and it was the death of that model, coupled with the fallout from the global financial crisis, which has led to Macquarie falling out of favour with investors.

It should be noted that this view isn’t accepted by all -- including, ironically the architect of the Macquarie Model and the bank’s current CEO, Nicholas Moore. The Financial Review’s Chanticleer columnist, Tony Boyd, stated today that: